Barge loading restrictions have pushed prices for some products in southwest Germany four times higher than the national average, writes Amaar Khan
Product prices in southwest Germany have been pushed higher by a surge in barge prices because of lower water levels along the Rhine.
Freight costs from the Amsterdam-Rotterdam-Antwerp (ARA) storage hub to Basel have risen fourfold to over €80/t ($89.50/t) since early March, according to barge broker Riverlake, while rates to Karlsruhe have more than tripled to about €55/t. Barges are generally used to transport products to inland Europe, or to import from ARA, and export to Switzerland. But low rainfall and higher temperatures have led to lower Rhine water levels, meaning that barges are not able to load at capacity and suppliers have to book more vessels to carry products.
The main point of congestion along the Rhine is at Kaub, close to where vessels discharge for Frankfurt, Riverlake data show. Water levels there are less than 1m high, meaning barges can only carry around 1,000t of product.
The higher barge freight rates are leading to a rise in prices for products in southwest Germany, which is typically supplied by barges along the Rhine. Prices in this region for heating oil, diesel and E5 gasoline have risen by €2.20-3.00/100 litres, compared with the national average.
Lower Rhine water levels are also limiting exports from Miro's 310,000 b/d Karlsruhe refinery in southwest Germany, leading to fears of production cuts. Lower refinery production in the region has added to barge demand. Shell ended crude refining at its 147,000 b/d Wesseling plant in Germany last month, although storage tanks will still be used after the closure. The tanks are now only serviceable by pipelines and barges, leading to higher barge demand.
